Bank Negara wants lower insurance costs for old vehiclesBy LEE YEN MUN - yenmun@thestar.com.myPETALING JAYA: Owners of cars and motorcycles that are 10 years or older will now be able to get insurance coverage without having to pay a loading of 200% to 300%. This follows a new Bank Negara ruling for all insurance companies to provide coverage with immediate effect. They are no longer allowed to implement loading fees provided the vehicles are roadworthy. In an announcement which takes effect immediately, Bank Negara said the vehicles concerned had previously been grouped as “displaced vehicles” or deemed high-risk vehicles. “Those with displaced vehicles that are currently underwritten by the Malaysian Motor Insurance Pool will no longer be subjected to the loading imposed on high-risk vehicles,” said a Bank Negara statement yesterday. It added that these vehicles would only be required to undergo annual roadworthiness checks at Puspakom. Sources said yesterday that the move was made following steps taken previously by insurance companies to charge owners of old vehicles between 200% and 300% above the normal market premium rates. Prior to this, a vehicle's age on the road was used as the yardstick to categorise its insurance risk, which in turn affects its premium rate. The announcement yesterday came about a month after Bank Negara issued a directive on third-party insurance under its New Motor Cover Framework. It reportedly said that for third-party cover, those owning motorcycles of 110cc would have to pay a premium increase of between RM1 and RM3.50 per year, or a maximum of 30 sen a month, over the next four years. For private cars of 1,400cc, the premium adjustment would be between RM6 and RM34 per year (a maximum of RM2.80 per month) over the same period.

The announcement in March had come under fire from consumer associations and politicians from both sides of the divide, including MCA president Datuk Seri Dr Chua Soi Lek. The groups believed that the increase in premiums would burden consumers from the lower income bracket, who were considered the majority among owners of older vehicles. The framework, to take effect next January, will see an adjustment in vehicle premium rates, which have not been revised since 1978. However, Dr Chua had said that insurance companies should use profits from the comprehensive motor vehicle cover premiums to cross-subsidise third-party cover premiums instead. Bank Negara also added yesterday that insurers were prohibited from compelling their customers to buy non-motor products for the sale of a motor insurance. This includes the purchase of personal insurance as a pre-requisite or complementary to a purchase of vehicle insurance.

English versionPress Statement Insurance for Old Vehicle should be lowered long time agoReferring to a press release from Bank Negara wants lower insurance costs for old vehicles. PAS and the vehicle users who are pressed for an expensive insurance payment by insurance companies to lower the price of insurance for the vehicle more than 10 years are pleased with the announcement of the Bank Negara. The users have been too long burden by this insurance company who charge the old vehicles with higher costs. PAS representative and the others representative has done their responsibility in the last parliament debate regarding on the insurance costs for the old vehicles issue.

It was also an achievement for the users as demanded for the insurance companies to lower prices of old vehicles insurance which is too expensive. To make the claim successfully the users or the people must work together so that what ever we want in future will be fulfilled by the relevant authorities. This is what we called the people (rakyat) power.